Nintendo announced on November 5 that it would adjust its operating profit forecast for fiscal 2024 (ending March 2025) to 360 billion yen from the previous 400 billion yen. This figure is also lower than the average market analyst forecast of 383.7 billion yen.
The reduction is based on actual sales in the first half of the fiscal year and an assessment of future market trends. The company also lowered its full-year sales forecast for the Switch game console from 13.5 million units to 12.5 million units, and its game software sales forecast from 165 million copies to 160 million copies. The company maintained its previously set exchange rate assumptions of 1 US dollar to 140 yen and 1 euro to 155 yen.
As a game console that has entered its eighth year, the market performance of Switch has begun to show signs of fatigue. The company has confirmed that it will release information about the next-generation console within this fiscal year, which has also affected the sales momentum of the current products to a certain extent. From April to September this year, Switch console sales fell 31% year-on-year to only 4.72 million units; game software sales also fell 28% to 70.28 million copies.
Industry experts generally believe that if the Switch, which is at the end of its life cycle, continues to maintain its status quo, it will face severe market challenges.
Serkan Toto, CEO of game consulting firm Kantan Games, said that since Nintendo is preparing a new generation of consoles and there are no blockbuster games in the year-end promotion season, it is difficult to attract new users to buy Switch. He suggested that the company could consider strengthening marketing efforts or launching substantial preferential measures such as bundling consoles and games.
Toyo Securities analyst Hideki Yasuda pointed out that the current decline of Switch in the US market is particularly obvious, and the product is gradually losing its market appeal. He believes that now is the right time to launch a new generation of consoles. If the status quo is maintained, the market performance of Switch may further decline.
However, Nintendo has maintained an active attitude in the commercial development of intellectual property (IP). The company recently opened a Nintendo Museum in Uji City, Kyoto Prefecture, and announced plans to make a live-action movie of the popular game series “The Legend of Zelda”, showing that the company is actively promoting the diversification of its IP business.
